(This article originally appeared in the New York Law Journal)

NEW YORK CITY-Energy independence is a major American policygoal, and the Internal Revenue Code has not been neglected in thatpush. There are tax credits for the manufacturing of "greentech"equipment and for purchases of energy-efficient appliances. Taxcredits are available for business and homeowner purchases ofproperties that generate renewable energy. A tax credit can beclaimed for each kilowatt-hour of electricity from variousrenewable energy sources. This article will focus on the businesstax credit for purchases of solar panels and other solar energyproperty, an area of growing interest to commercial rental propertyowners. In lieu of the tax credit, property owners for a limitedtime can claim a grant equal to the amount of the credit, withfewer restrictions.

Credits
The energy tax credit in Code section 48 is equal to 30% of thebasis of purchased solar energy property used in the United Statesin a trade or business or income-producing activity. Solar energyproperty includes assets that use solar energy to generateelectricity, or to heat or cool a structure, as well as solar waterheaters and "equipment which uses solar energy to illuminate theinside of a structure using fiber-optic distributed sunlight." Thecredit rate drops to 10% for solar energy property placed inservice after Jan. 1, 2017. The basis of the energy property isreduced by half of the amount of any credit claimed on theproperty.